Seeking Alpha

A few weeks ago, I discussed IBI Group's (OTCPK:IBIBF) debt as a potentially attractive risk/reward. Unfortunately, the company has since issued a very ugly quarterly report that has resulted in IBI's debentures falling to less than 40 cents on the dollar.

At the time, there were two major reasons I felt the downside was protected:

1) IBI's current assets covered the company's total liabilities at the market price of the company's debt, and

2) Unused portions of the company's credit line were large enough to pay off the company's debentures

Both of these "protections" disappeared in the company's latest results! First, the company wrote down about $58 million in receivables and inventory. This amount alone could have paid...

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